Construction on Natural-Gas-Fired Units Reaches 18,000 Megawatts

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Researched by Industrial Info Resources (Sugar Land, Texas)--After dropping to a low in 2005 when over-capacity was created by the merchant construction boom at the turn of the century, market forces have pushed natural-gas-unit construction activity in the U.S. to a three-year high in 2008. Activity is up for the third consecutive year, as 210 natural-gas-fired units totaling 18,000 megawatts (MW) are under construction in the U.S.

Click on the image at right to view a chart showing natural gas capacity construction by year since 2005.

Natural gas is experiencing a resurgence as a fuel of choice because of its affordability, accessibility, reliability and clean-burning characteristics, which minimize the environmental impact of gas-fired turbines. In addition, advancements in efficient combined-cycle technology have led to natural gas being used for baseload capacity.

"Since the beginning of the year, more than 4,000 MW of new capacity has kicked off construction, and development activity is on the rise with another 19,000 MW added to our project tracking database since January," said Shane Mullins, Vice President for Product Development of Industrial Info. "We see the growth trend for natural gas to continue into 2009, as there is another 48,000 MW scheduled to start construction during the next 18 months. Granted, not all of this is going to move past the drawing board, but we are forecasting approximately 11,000 MW of new natural gas capacity to begin construction in 2008, which could represent more than $8 billion in 23 states."

Noting the affordability and clean-burning characteristics of natural gas, Duke Energy (NYSE:DUK) (Charlotte, North Carolina) is planning to add two 600 MW combined-cycle, natural-gas-fired units at two power plants: Buck Steam station in Salisbury, North Carolina; and Dan River steam station in Eden, North Carolina. The projects will cost Duke Energy nearly $1 billion to construct. Construction on the Buck Steam station's combined-cycle unit is scheduled to start late this year. Construction at Dan River will follow. Shaw Stone & Webster Engineering (Englewood, Colorado) is providing engineering and construction services for both projects. This marks the first project for Duke Energy using efficient combined-cycle technology.

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Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.